At Avi Urban, we work with the experts to help you make the best decisions when buying your new townhome or apartment with us. One of these experts is Laura Parsons, Bank of Montreal Manger of Mortgage Specialists and Calgary Sun Columnist.
This week, Laura is back to bring you a clever and unique way to stop renting and get into the property market! “Many people see homeownership as something that will happen later in life, but why not consider getting into the game before then?”
Parsons suggests one clever way to purchase your new home is to join forces with a friend. “Instead of waiting for the ‘next step,’ two friends can join forces and buy their first home together,” she shares, “and why pay someone else’s mortgage when you can pay your own?”
Some things to think about before grabbing your closest BFF and taking the homeownership plunge:
Figure out what you’re each paying in rent. In one particular case, Parsons knew that each friend was paying about $1,300 per month in rent. “That’s about $2,600 that could go directly towards a mortgage,” she says, and considering a general house price and 5% down, their mortgage could be about $1,600 a month, “and that’s substantially less than the $2,600 these two friends were paying.”
Find out the other costs like property taxes and bills. Parsons says, “the friends would need to determine what the taxes would be on the property as well as some of the other bills that needed paying, but if they purchased a home together, they could be saving money and building equity, a win-win.”
Your rent increases each year, but your mortgage doesn’t. “With a fixed-rate mortgage, your payments remain the same for the term of the mortgage,” asserts Parsons, “and there’s also great pride in ownership.”
Talk to your lawyer. Parsons insists that “before you decide to join forces with someone else to buy a home, it’s important to speak to a lawyer to find out about the risks of joint homeownership and what legal agreements you should have in place with your co-owner. It can protect your equity in the home and allow you to make future decisions about the home.”
Parsons knows, “in a buyer’s market, if you can pool your resources, you can get out of renting.” If you have a question about your home financing, reach Laura Parsons at email@example.com.